Posted by John Corey on June 18, 2006 at 11:40:36:
JJ,
Thanks for indicating what you prefer. Can you narrow it even more? Why quick cash? Or are you really saying no hassle and cash? Splitting hairs some people buy new construction that is 1-2 years away from the property being complete. Hence there is nothing to worry about until the developer is almost ready to turn over the unit. Good leverage.
So, that would provide cash, no hassle but it is not quick.
Focusing on the quick for a minute. If there are quick deals, how quick would be reasonable? Yes, a deal could be a matter of minutes or days when we really push the edges. Most ‘quick’ deals are going to take a bit longer (get the contract locked up and then marketing the deal).
A way to be a passive investor (quick or slow, cash or long term hold) is to work with a partner. A partnership can be structured many different ways (one is a lender, one hold an option, both on title, both own part of a company that is the investment vehicle). In this model you have a bigger range of deals but maybe too much complexity as partnerships can be difficult if not organized correctly.
In conclusion…
Lets developer your requirements more so that we can narrow down the possible solutions.
At the same time if you can quantify what you are thinking in terms or results or capital invested that can also create some boundaries.
John Corey
PS. If you want to keep some of the specifics private email me the parts that you do not feel you should post.
I’ve got plenty of cash but not a lot of time to spend looking for deals. Consequently, I’m looking for suggestions from the veteran investors on the board for RE Investment Strategies that are simple, easy, and let me leverage the enviable position of being able to buy cash, but do not require a lot of time.
As a goal, I’m focused on generating quick cash and I don’t want to be a landlord.
Can you explain your aversion to landlording? I offload these responsibilities to local managers, which keeps me somewhat separated from the tenants and day to day operations. The 7-8% of the rent I lose to management fees is more than made up by the value my managers bring me elsewhere (each manager is a construction-type whom I trained to manage. and each has a good habit of finding me new rehab projects).
But even with local managers, this is not passive. It might have been passive when I has 2-3-4 units. But when the unit count gets to 20-30-50-80… it ain’t passive.
You may find holding notes to be a profitable, and somewhat passive, enterprise. I ceated my notes from properties I rehabbed and sold. But other folks do nothing but trade in existing notes. there are note brokers out there who can assist, until you figure out how to find your own. check out the cash flow board.
if you want to get your hands a little dirtier, you can try the rehab/flip route. A skilled crew is worth is weight in gold, as many people here can attest. You take on the executive level position. a good crew can move mountains in 2-3-4 weeks. You could be in and out of a property in 90 days. You will need to be in communication with the crew chief 3-4 times a day, for 5 minutes here and 5 minutes there, making decisions. and an occasional trip to the site, to satisfy yourself that the job is moving along. I get more satisfaction from rehabbing that any other part of the biz. I can see the transition from horrible to wonderful. the fact that it is a profitable enterprise makes it all the better.
You have got really experienced people answering you with David and John.
I would add, more explicitly, doing hard money loans or partnering with people who actively do big deals for a split of the profits.
If you are willing to do hard money loans for rehabs you can make very large yields, on the order of well over 100% on your money for very short term loans.
One model for doing deals with mobile home parks or self-storage is to partner with someone (an entrepreneur) who has experience doing these kinds of deals but limited cash. The entrepreneur becomes the person on the ground who moves to the park to turn it around, the cash person provides the cash &/or credit during the turn-around period. They then split the profit a few years down the road when the park or self-storage property is sold or refinanced. There is big money there.